Royal Bank of Scotland Seeks US Shareholders' Approval

Strategic Insights -

Royal Bank of Scotland (RBS) chief executive George Mathewson will travel to the US this week in an effort to win over US shareholders for its bid for National Westminster. The bank has registered its £21.8bn offer with the US Securities and Exchange Commission, allowing it to engage with US shareholders before a new SEC rule takes effect on January 24, which would exempt foreign companies with less than 10% US-owned shares. RBS began takeover talks with NatWest on September 27, just days after Bank of Scotland (BoS) made a hostile bid, giving RBS a week's head start in arguing its case to US investors who hold between 7 and 9% of NatWest's shares.

Key Takeaways:

  • RBS has registered its £21.8bn bid for NatWest with the US Securities and Exchange Commission, enabling it to engage with US shareholders before the new SEC rule takes effect on January 24.
  • The SEC filing gives RBS a week's head start over rival BoS in arguing its case to US investors who hold between 7 and 9% of NatWest's shares.
  • RBS began takeover talks with NatWest on September 27, three days after BoS made a hostile bid.
  • RBS will release its first quarter results for October to December and a profits forecast for the first half from October to March this week.
  • NatWest is to hold meetings with institutional investors in the UK to persuade them that its new management represents a credible independence option.
  • BoS's £24.3bn offer, including a £2bn special dividend, is currently worth more than RBS's bid, but the bank is struggling against a perception that it will lose NatWest to its Edinburgh rival.
  • NatWest has just one more week to mount its final defense against BoS and RBS.

Statistics:

  • RBS's offer for NatWest: £21.8bn
  • BoS's offer for NatWest: £24.3bn, including a £2bn special dividend
  • Percentage of NatWest shares held by US investors: 7-9%
  • Number of days before the new SEC rule takes effect: 39 (as of the article's publication date)

Sources:

  • The Financial Times, "RBS seeks US support for NatWest bid"
  • The Guardian, "Bank of Scotland delivers hostile bid for NatWest"
  • NatWest's official website,
  • Royal Bank of Scotland's official website